Full Judgment Text
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REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 1232 OF 2019
R V PRASANNAKUMAAR & ORS. Appellant(s)
VERSUS
MANTRI CASTLES PVT. LTD & ANR. Respondent(s)
WITH
CIVIL APPEAL NOS. 1443-1444 OF 2019
JUDGMENT
Dr. Dhananjaya Y. Chandrachud, J.
The National Consumer Disputes Redressal Commission
(“NCDRC”) by its impugned order dated 8 June 2018 disposed of
the consumer complaint filed in a representative capacity under
Section 12(1)(c) of the Consumer Protection Act, 1986. The
NCDRC has come to the conclusion that though under the terms of
the flat purchase agreement, possession was liable to be handed
over to the buyers on 31 January 2014, there was a breach on
the part of the developer in complying with its contractual
Signature Not Verified
Digitally signed by
MANISH SETHI
Date: 2019.02.19
16:56:26 IST
Reason:
obligations. The NCDRC has noticed that the occupation
certificate was received only on 10 February 2016 and it was
thereafter that from May 2016, certain letters offering
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possession were issued by the developer. Based on this, the
NCDRC awarded compensation upto 31 July 2016 in the form of
interest at the rate of 6 per cent per annum.
There is a finding in the impugned order that though the
flat purchase agreement contained a stipulation for the payment
of compensation at the rate of INR 3 per sq. ft. per month for
delayed handing over of possession, the amount as stipulated is
too meager to fulfil the requirement of just compensation to
the purchasers. Accordingly, the following directions have
been issued in the impugned order;
“i) The OPs are directed to handover the possession
to the complainants (if not already handed over)
within a period of 60 days from the date of this
order and the complainants are also directed to
complete all the formalities for taking the
possession.
ii) The complainants are entitled to get
compensation for delayed possession from 01.02.2014
till 31.07.2016 as per the agreement i.e. @ Rs. 3/-
per sq. ft. per month. Over and above this
amount, the opposite parties shall be liable to pay
interest @ 6% p.a. from 01.02.2014 till 31.07.2016
on complainants deposited amounts with the CPs
before the due date of possession i.e. 31.01.2014.
iii) OPs are directed to complete the common
facilities and amenities as per the agreement
within a period of six months from the date of this
order, failing which the OPs shall pay compensation
@ Rs. 1,000/- per month to each of the complainants
under the present complaint.
iv) The OPs are also directed to pay Rs. 2,000/-
(Rupees two thousand only) to each of the
complainants towards cost of litigation in the
present case.
v) All these amounts except compensation for
common facilities and amenities shall be adjusted
against the amount due on the complainants, if any,
at the time of handing over of the possession and
if no amount is due on the complainants, then the
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amount shall be paid by the OPs to the complainants
on the date of possession.”
Two sets of appeals have been filed against the order of
the NCDRC. Civil Appeal No. 1232 of 2019 has been instituted by
the flat purchasers while Civil Appeal Nos. 1443-1444 of 2019
is filed by the developer.
The flat purchasers are aggrieved by the order of the
NCDRC since it grants interest only upto 31 July 2016 and not
thereafter.
Mr. Bishwajit Bhattacharya, learned senior counsel
appearing on behalf of the flat buyers has submitted that the
NCDRC was in error in assuming that all flat buyers had been
given letters of offer for possession prior to 31 July 2016
which it has been submitted, is factually incorrect.
Learned senior counsel submitted that as a matter of
fact, possession has not been offered to all the purchasers
even as on date and hence there was no justification on the
part of the NCDRC to fasten the liability to pay interest only
upto 31 July 2016 and not thereafter.
On the other hand, Mr. P.S. Narasimha, learned senior
counsel appearing on behalf of the developer has submitted that
in view of the conditions contained in the flat purchase
agreement allowing compensation at the rate of Rs. 3 per sq.
ft. per month, the award of interest of 6 per cent per annum
was not justified.
We will at the outset deal with the submission of the
developer that the NCDRC was not justified in awarding interest
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at the rate of 6 per cent per annum and that the terms of the
flat purchase agreements must prevail.
We are in agreement with the view of the NCDRC that the
rate which has been stipulated by the developer, of
compensation at the rate of 3 per sq. ft. per month does not
provide just or reasonable recompense to a flat buyer who has
invested money and has not been handed over possession as on
the stipulated date of 31 January 2014. To take a simple
illustration, a flat buyer with an agreement of a flat
admeasuring a 1000 sq. ft. would receive, under the agreement,
not more than Rs 3000 per month. This in a city such as
Bangalore does not provide just or adequate compensation. The
jurisdiction of the NCDRC to award just compensation under the
provisions of the Consumer Protection Act, 1986 cannot in the
circumstances be constrained by the terms of the agreement. The
agreement in its view is one sided and does not provide
sufficient recompense to the flat purchasers.
The outer date for handing over possession was 31 January
2014. The admitted facts indicate that the occupation
certificate was received on 10 February 2016. Consequently,
there was a delay of at least two years since possession could
not have been handed over prior to obtaining the occupation
certificate.
In the circumstances, the award of interest at the rate
of 6 per cent is reasonable and justified. The NCDRC however,
came to the conclusion that interest should be awarded only for
the period from 1 February 2014 to 31 July 2016.
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We find merit in the submission of the flat buyers that
the liability to pay interest has been inappropriately confined
only upto 31 July 2016. We find from the record that the
developer, in the affidavit by way of evidence of its
representative before the NCDRC, admitted that as many as 43
complainants, who had asked for possession were not given
possession for the simple reason that they had moved the NCDRC
in a consumer complaint. The relevant part of the affidavit is
extracted below:-
“I state that rest of the 43 complaints who
have asked for possession have not been given
possession for the reason that as on
29.06.2016, the Opposite parties had received
notice of this Hon’ble Commission in respect
of filing of the present case. In the
present dispute, the complainants have sought
prayer at para A to G under different heads.
While they sought the relief of handing over
possession of their respective flats in para
A, at paras B, C, D, E and F, they have also
sought certain reliefs of compensation by
making certain allegations of deficiency in
service, compensation for delay in possession
etc., against the opposite parties.
Therefore, during the pendency of present
dispute, the complainants were not given
possession in view of the reliefs sought in
paras B to F and the statement of allegations
made in the present complaint.”
The fact that the flat purchasers had moved the NCDRC in
a representative capacity for the redressal of their grievances
is in our view, no justification to deny them possession. The
fact that the flat purchasers had moved the NCDRC would not
disentitle them to receive possession in accordance with the
terms of the agreement.
When the appeal filed by the developer came up before
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this Court on 1 February 2019, the following order was passed;
“Delay condoned.
Mr. P.S. Narasimha, learned senior counsel, has
stated before the Court that 55 flat purchasers
are involved in the building project in question.
Learned senior counsel states on instructions
that possession has been handed over to sixteen
flat buyers and possession to nine flat buyers
will be offered and handed over within a period
of one week from today. These 25 persons, it has
been submitted, have paid the entirety of their
dues under the flat purchase agreement.
In respect of remaining 30 flat buyers, Mr.
Narasimha states that there are outstanding
payments.
Learned senior counsel appearing on behalf of the
respondents disputes this position. Learned
senior counsel for the respondents has submitted
that 95 per cent of the payment has been made
while the balance 5 per cent is payable at the
time of possession.
In view of this controversy, we direct the
petitioners to place on record an affidavit
indicating the amounts which have been received
from the remaining 30 flat buyers and the amount
which is due and payable in terms of the
agreements with them.
List on 11 February 2019.
In the meantime, no coercive steps shall be taken
against the petitioners in pursuance of the
impugned order of the NCDRC.”
From the above order it emerges that even according to
the developer, out of 55 flat purchasers, possession had been
handed over to 16 and it was stated that possession to 9 more
buyers would be offered within a period of one week.
Mr. P.S. Narasimha, learned senior counsel has stated
that in addition to the above 9 flat buyers, the developer will
be handing over possession to 2 more flat buyers immediately.
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This indicates that as amongst the 55 purchasers, 25 persons
have been now offered possession and an additional 2 would be
offered possession shortly hereafter.
In view of the above position, the NCDRC was not
justified in proceeding on the basis that the liability to pay
interest would cease to operate as on 31 July 2016. Since
possession has not been handed over, the developer cannot avoid
the liability to pay interest at the rate awarded by the NCDRC
until the date when possession is actually handed over.
Hence, while allowing the appeal, we issue the following
directions:
(i)
The liability of the developer to pay interest at the
rate of 6 per cent per annum shall continue to operate
until the date on which each of the respective flat
purchasers is offered possession;
(ii)
The order passed by the NCDRC confining the award of
interest for the period from 1 February 2014 to 31 July
2016 is modified in terms of the directions issued in
clause (i) above;
(iii)
The NCDRC in execution of the impugned order as
modified by the present order, shall verify with
reference to each flat purchaser the date on which an
offer of possession has been made. The liability to pay
interest at the rate of 6 per cent per annum shall
cease on the date when an offer of possession has been
made to each of the flat purchasers.
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Accordingly, the appeal filed by the flat purchasers
(Civil Appeal No. 1232 of 2019) is allowed and the appeals
filed by the developer (Civil Appeal Nos. 1443-1444 of 2019)
are dismissed.
Pending application(s), if any, shall stand disposed of.
…………………………………………………………………...….J
(DR. DHANANJAYA Y. CHANDRACHUD)
..……………………………………………………………….....J
(HEMANT GUPTA)
NEW DELHI,
February 11, 2019
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ITEM NO.2 + 12 COURT NO.9 SECTION XVII
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Civil Appeal No(s). 1232/2019
R V PRASANNAKUMAAR & ORS. Appellant(s)
VERSUS
MANTRI CASTLES PVT. LTD & ANR. Respondent(s)
(FOR ADMISSION and IA No.183525/2018-ADDITION/DELETION/
MODIFICATION PARTIES and IA No.183524/2018-CONDONATION OF DELAY IN
REFILING)
CA NO. 1443-1444/2019 (XVII)
Date : 11-02-2019 This appeal was called on for hearing today.
CORAM : HON'BLE DR. JUSTICE D.Y. CHANDRACHUD
HON'BLE MR. JUSTICE HEMANT GUPTA
Counsel for the parties:-
Mr. Bishwajit Bhattacharya, Sr. Adv.
Mr. Chandrachud Bhattacharya, Adv.
Mr. Abhinav Mukerji, AOR
Mr. P.S. Narasimha, Sr. Adv.
Mr. Shekhar G. Devasa, Adv.
Mr. Manish Tiwari, Adv.
Mr. Luv Kumar, Adv.
UPON hearing the counsel the Court made the following
O R D E R
The appeal filed by the flat purchasers (Civil Appeal No. 1232
of 2019) is allowed and the appeals filed by the developer (Civil
Appeal Nos. 1443-1444 of 2019) are dismissed in terms of the signed
reportable judgment.
Pending application(s), if any, shall stand disposed of.
(MANISH SETHI) (SAROJ KUMARI GAUR)
COURT MASTER (SH) BRANCH OFFICER
(Signed reportable judgment is placed on the file)